SINGAPORE (Reuters) - Independent directors at Syngenta AG SYNN.VX will have to approve any significant changes at the Swiss seeds and pesticides group after it is bought by state-owned ChemChina, and they will ensure its investment-grade rating is retained, a senior Syngenta executive said.
ChemChina last week made a $43 billion bid for Syngenta, in China’s biggest overseas takeover, aimed at improving food production in the world’s largest agricultural market.
The deal, pending regulatory approvals, has raised questions on its financing, and Syngenta’s future corporate governance, given the opaque nature of Chinese state-owned enterprises.
Four independent directors will be appointed to the board, and approvals from at least two of them will be required to approve any significant changes, said Davor Pisk, Syngenta’s chief operating officer overseeing Asia Pacific and North America.
They will also ensure that Syngenta will retain its investment grade ratings, underpinned by a provision in the agreement, Pisk told Reuters in an interview on Friday.
Pisk added that the ChemChina deal was not predicated on cost synergies, and would not lead to job losses of Syngenta employees.
The ChemChina bid came after Syngenta rejected a proposal from U.S. agribusiness giant Monsanto Co MON.N last year.
“The security of an all-cash deal with much lower regulatory risks because of limited portfolio overlaps makes it a much more compelling proposition for shareholders,” Pisk said of ChemChina’s bid.
Reporting by Rujun Shen and Gavin Maguire; Editing by Muralikumar Anantharaman